Microsoft settles its legal dispute with Fox and can finally make a new Killer Instinct

There is a lost generation of video game players that hear the name Rare Inc. and don’t immediately think of Microsoft’s Kinect or the Xbox 360’s weirdly sterile avatars. During the mid-90’s, Rare was king. The developer was busy churning out some of the best video games of the decade, from Donkey Kong Country to GoldenEye 007. Rare was on top, and eventually was purchased by Microsoft in 2002 for the cool sum of $375 million. But things change, and the once great industry giant now focuses its attention on smaller games made for niche audiences. Rare has had moderate success with titles like Kinect Sports and the Viva Piñata series, but that older generation haven’t forgotten. If Rare is lucky, and if it is smart, a recent legal decision, however, may provide it with just the “in” it needs to get back on top.

It’s been more than a decade and a half since the last Killer Instinct game came out for Nintendo 64, but even now there are fans that have been holding out hope for a new sequel in Rare’s long lost fighting game series, even though the property was locked up in a bitter legal battle. As of Thursday though, Microsoft and Rare can finally, legally make another Killer Instinct.

In September, Microsoft spurred new rumors that it was making Killer Instinct 3, or at the very least preparing an HD re-release of the original Killer Instinct, when it renewed its trademark for the series. It wasn’t quiet about it, either.

“With all due respect to our friends in the media who like to frequent trademark sites, we thought we’d break this one ourselves,” said Microsoft, “Our legal eagles have authorized us to say: ‘We have either renewed or re-filed a trademark application [for Killer Instinct] in various jurisdictions.”

Unfortunately for fans, Microsoft spoke too soon, and it wasn’t allowed to keep the trademark. The United States Patent and Trademark Office denied Microsoft’s application because News Corp.’s Fox currently owned the trademark for the name. Fox wasn’t planning on making its own game where people have improbably names like Fulgore though. It held the name because of a shortlived television drama from 2005 also named Killer Instinct. That dispute has officially been settled.

The USPTO announced that Fox and Microsoft have entered a Coexistence Agreement wherein the two companies have agreed to not break each other’s combos if either tries to make anything called “Killer Instinct” in the future.

With that settled, will Microsoft let Rare get to work on Killer Instinct 3? Microsoft Studios creative chief Ken Lobb would certainly like to. Lobb is, after all, the creator of the series. “I obviously have personal feelings about Killer Instinct, but I do think it’s got a place,” said Lobb at the X10 event three years ago, “Let’s bring back something that people loved in the past and see how it does on Live Arcade.”

When it comes to the battle between Sony and Microsoft in the console wars, one clear advantage Sony has had has been in console exclusives. There is no reason to believe that that will change significantly with the next-gen of systems, as Sony’s list of internal studios continues to grow. With a still fairly well-known property like Killer Instinct just sitting there, it’s hard not to imagine that Microsoft wouldn’t at least consider reviving the franchise as an exclusive for its next Xbox.

Nostalgia for the ‘90s is big business these days. Fans should brush up on their Orchid skills anyway and practice that 76 hit ultra combo from Cinder. Just in case.